Oil prices drive sales of 'gas guzzlers' down as GM announces moves to build fewer big cars
Sat 07 June 2008
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UK registrations of 4x4s and other large vehicles fell sharply in May this year compared with the same month a year before. 4x4 registrations were down 18% while there were increases in sales of smaller cars, according to the latest data reported by the Society of Motor Manufacturers and Traders (SMMT). Meanwhile, General Motors has announced plans to reconfigure its US operations to produce a higher proportion of smaller cars.
As the pump price of petrol and diesel hit new highs - of around 114p and 126p per litre respectively - on the back of sharp increases in crude oil prices, new car buyers opted to purchase smaller cars produced by companies including Smart, Kia, Hyundai, Fiat and Nissan.
Sales of cars produced by Daimler were 50% down in May, compared with a year earlier, while Porsche sales fell 37%. Landrover sales also declined 32% while Saab and Lexus were also sharply down. The biggest winners were Smart (up 147%), Kia (up 36%) and Hyundai (up 21%).
Total car sales were down 3.5% in May 2008 compared with the same month last year.
Meanwhile, sales of larger vehicles are also down sharply in the United States. General Motors followed Ford in announcing plans to reconfigure the company's US production facilities to make more small vehicles and fewer SUVs and other high fuel-consuming vehicles.
GM announced plans recently to shut four SUV and pick-up truck plants in the US, Canada and Mexico, shrinking its North American capacity from 4.2m to 3.7m vehicles a year. At the same time, the company has unveiled plans to develop a new Chevrolet compact car in the US with production is due to start in mid-2010.
General Motors is also threatening to sell its Hummer division in response to higher oil prices. Announcing the closure of the four factories, Rick Wagoner, GM's chief executive, said (reported in the Financial Times) that high prices were changing customers' habits extremely quickly. "We at GM don't think this is a spike or temporary shift. We believe that it is by and large permanent," he said.
The FT also reports that SUVs' market share in France and Spain, western Europe's third and fourth largest car markets, fell by more than 50 per cent and 35 per cent respectively from January to April this year, according to EurotaxGlass. Sports cars' market share is also down sharply in both countries, which levy high carbon taxes on cars.
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